Law Practice Management Asked and Answered Blog

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June 2011

Jun 28, 2011


Effectiveness of Business Cards For Lawyers

Question:

I rarely use my business card anymore. Is there any value for a lawyer to have one anymore?

Response:

The business card is not what it once was. Years (decades) ago, the business card was the totality of your identity and contact information, and sometimes a little more information about you. Your name, firm name, address and phone number was everything needed to do business with you. For some, especially solos proprietors, it was your tiny firm brochure. Times change.

The past few years have seen some changes. Many of us work more virtually than before, communicate by email, and often change job titles and employers almost as fast as we can print up new cards. We pass along our contact information as part of our email signature. Considering the sterile, information-only business card of the past, isn't it time to reconsider what a business card can do for you.

Tip: Rethink (outside the box) what your business card can do for you. Because it isn't as necessary for contact information, use it to convey your brand, your image, your firm or practice "theme." Consider more graphical or iconic representations or other ways to leave an impression, not just information. Also, think about multiple business cards for different uses – maybe one for contact info, one for specific practice areas.

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John W. Olmstead, MBA, Ph.D, CMC

Jun 28, 2011


Model For Sustaining a Law Practice: Managing the S Curve

Question:

In a recent firm meeting the question was raised as to whether law firms hit a wall when they run up against new competitors, new technologies, new business models, or when their talent peaks. Is there a general model  of sustaining a law firm?

Response:

The mechanics of managing a law firm are too complex to address in this forum. It would be better to discuss what to tell you what to look for that tells you, well in advance of a fee revenue plateau, that your practice needs some work. Once you know where your practice is getting wobbly, then you will have a clearer idea of how to fix the mechanics.

We tell our clients that they are on an "S-Curve" in which slow and steady growth often occurs at the start of the law practice, followed by gaining momentum and rapid growth, then tapering off as practice areas get saturated or competitors enter the practice areas in which the firm is engaged. Watch these components for advance warning:

  1. Competition – any practice area attractive to you will also attract other law firms, so monitor new entrants starting to chip away at your clients.
  2. Capabilities – you created or bought some new technology, skills or other assets to start your firm/growth, but the distinctiveness of these eventually wears off and they are likely to be available to competitors once their value is clear.
  3. Talent – you had it when you started your firm, but attorneys and staff have become "free agents" and increasingly move between law firms more frequently and you may lose a key asset.

There may be other components unique to your practice and market. The point is that there is more than meets the eye in a simple growth curve. Figure out exactly what assets and activities are part of your particular growth and watch each one, as well as how each component affects the others (e.g., a departure of talent from your firm to a competing law firm, along with knowledge of specific major case or a key technology is a triple blow.)

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John W. Olmstead, MBA, Ph.D, CMC

Jun 21, 2011


Using Effective Firm Meetings to Improve Accountability and Boost Productivity

Question:

Our firm used to have weekly firm meetings to discuss management and operational issues. We discontinued them due to the excessive time being spent and questionable results and value. Now we are finding that we are totally unfocused and having problems with poor accountability and things falling through the cracks.  We are now considering starting up weekly meetings again but want to insure that we do a better job of managing meetings than we did in the past. What are your thoughts?

Response:

Before scheduling a meeting consider the purpose of the meeting. In general there are the following four types of meetings:

  1. Strategy Meetings are rich group discussions involving strategy and planning sessions, brainstorming, group budgeting, marketing, or financial planning. These meetings are effective when everyone understands the purpose and the ground rules.
  2. Reporting Meetings consist of one person informing the others in the room and sharing of information. These meetings are valuable only if the news is meaningful to most of the attendees. There may be Q&A and discussion, and different people may report out during the same meeting. These meetings should be structured.
  3. Status Meetings are often low in value and you should keep them sort. Attorneys and other team members need to share information and brief sessions are effective at keeping the team on the same page. Consider stand-up meetings – where literally, everyone is standing. It keeps the meetings short. Require agendas.
  4. Dilemma or Issue Meetings where just a few of the participants engage in detailed problem solving, are inefficient. Don't drag the whole group into dilemma or issue meetings. If your meeting is headed this direction deflect it for one-on-one time.

Meetings work best when they have:

  1. An agenda – for reporting and status meetings.
  2. A meeting chair or facilitator – who helps the attendees stick to the agenda.
  3. Meeting minutes – listing decisions, action items, and due dates – sent to all participants shortly after the meeting.
  4. Ground rules – especially for strategy meetings.

Take charge of meetings. Unmanaged meetings are time wasters.

You might want to start with short weekly status meetings using the format outlined above. Conduct reporting meetings on a monthly basis and strategy meetings on a quarterly basis or annual using a off-site retreat format.

Start slow and go from there. Push for accountability and results.

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John W. Olmstead, MBA, Ph.D, CMC

Jun 07, 2011


Implementing Law Firm Strategic Plans: Accountability and Follow-Thru

Question:

Our firm is a 25 attorney business litigation boutique firm in Southern California. I am a partner in the firm and chair of the firm's long range planning committee. Last year we spent a lot of time putting together a strategic plan for the firm. While we have a nice plan including specific action items - we are having problems with implementation. We are stuck and not getting anything done. What are your thoughts?

Response:

This is a common problem. Even in corporate america the implementation rate is low.

Many law firms experience similar results. They spend time and energy on mission, vision, goals, objectives and strategies but run out of gas when it comes to specific action planning outlining tasks, milestones and deadlines, individual specific accountabilities, and resource requirements. You just can't cut this step short. All strategic plans should include action plans that list under each strategy specific tasks with milestones, deadlines/due dates, name of person(s) responsible, and required resources. Consequences, compensation, etc. should be tied to task accomplishment or non-accomplishment.

I suggest that the strategic action plan for the firm be considered a project and incorporate:

  1. A project definition (charter)
  2. A project plan
  3. A project control system including progress measurement, communication, and correction action.

Status should be reviewed at committee meetings on a monthly basis and at firm meetings on a quarterly basis.

Often we suggest that Excel be used for the action plan segment of the strategic plan with columns for strategies and tasks and sub-tasks, person responsible for task accomplishment, start date, due date, date completed, completed by, and resources required.

In larger firms or for more complex action plans with multiple people responsible we suggest that an online project management system be used to manage the action plan. Many of our clients use either www.teamworkpm.net or www.basecamp.com. Some firms have practice management system capable of performing project management functions.

Click here for our blog on strategy

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John W. Olmstead, MBA, Ph.D, CMC

Jun 01, 2011


How Can Protect My Law Firm From Embezzlement?

Question:

At a recent managing partner forum several of the attendees at the seminar discussed recent experiences with embezzlement by employees. What can we do to protect our firms?

Response: 

During the past 25 years that I have been working with law firms I have been amazed at the number of embezzlements caused by unscrupulous attorneys, bookkeepers, office managers and other staff members. And yes – even partners. One out of five law firms in my client sample has actually lost funds due to some form of embezzlement and caught the offenders.  While some of the firms have prosecuted and taken other actions against the offenders the process was very painful, time consuming, and typically the funds are never recovered in entirety. Of course, this is if you catch the offenders.

Many small firms’ internal control procedures are so lax that funds could be lost through embezzlement and the firm would not even know it.

Only through effective internal accounting and financial controls can law firms protect their offices from theft. The goal is not to catch offenders – but to have a system in place that discourages and prevents the theft from occurring in the first place.

The process involves implementing internal accounting and financial controls. In essence – segregation of duties. Here is an overview of such a system:

                    Internal Control is the plan of organization and all of the coordinate methods and measures adopted within a business organization to safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies.

The four basic elements considered essential in a satisfactory system of internal control are:

  1. A plan of organization that provides appropriate segregation of functional responsibility and duties.
  2.  A system of authorization and record procedures adequate to provide reasonable accounting control over assets, liabilities, revenues, and expenses. 
  3. Sound practices to be followed in performance of duties and functions of each of the organizational areas. 
  4. A degree of quality of personnel (competency) commensurate with responsibilities.

SUGGESTIONS:

 RECEIPTS

  1.  Have someone other than the bookkeeper open the mail. (i.e. receptionist) 
  2. Have the person who opens the mail prepare a list of all checks/cash received in duplicate. 
  3. Have person responsible for mail route one copy of the check/cash list to the office manager or managing partner and the other copy along with checks/cash to person responsible for making the bank deposit. 
  4. Assign someone responsibility for preparing the deposit and taking it to the bank. This person should verify the check/cash list against checks and cash, prepare deposit slip and make the bank deposit. 
  5. Upon return from the bank the deposit clerk should provide the bookkeeper with the deposit slip, receipt from the bank, and the check/cash list. 
  6. Bookkeeper enters the deposit into the computer system. 
  7. Office manager runs and mails monthly statements – not invoice fee bills – to clients.

DISBURSEMENTS

  1.  Don't give bookkeeper check signing authority.
  2.  Have someone other than bookkeeper approve vendor invoices. Require evidence of approval on all invoices. 
  3. Require purchases to be handled by someone other than the bookkeeper and the individual who approves vendor invoices for payment.

 GENERAL

  1.  Obtain adequate fidelity bonding insurance coverage. 
  2. Rotate duties when possible. 
  3. Have bank statements mailed to managing partner's home. He/she should bank statements and transactions and then give to someone other than bookkeeper and other personnel involved in processing receipts or disbursements. Some firms have their outside accounting firm perform this function. 
  4. Reconcile all bank accounts monthly. 
  5. Insure that adequate record retention systems are in place. 
  6. Formulate policies that provide for reasonable protection of assets. 
  7. Insure that adequate personnel selection methods, training programs,  supervision practices, and performance evaluation techniques conducive to control, providing assurance than an adequate number of employees are available to perform operational duties. 
  8. Insure that vacations are mandatory and contain provisions for competent replacements to perform all of the assigned duties of the vacationing employees. 
  9. Outline job duties in written job descriptions.  
  10. Develop an accounting manual. 
  11. Properly supervise, verify, and follow-up on all operations, people, and systems.

Click here for our blog on financial management

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John W. Olmstead, MBA, Ph.D, CMC

 

 

 

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